You’ll never see $70 oil again.

[Snagglefoot]

Its not just oil price limiting drilling - its interest rates. The shale revolution happened in a period of very cheap money.

Venezuala is a completely different animal. Chevron lost there but last time. I would imagine someone would have to lay out some pretty big guarantees - like the USG - in order to entice anyone to invest there now. More likely Venezuela would need to pay up front and someone like Halliburton does the work / Venezuela still owns it. Much like in Russia pre Ukraine war.

$70 and low interest rates would be enough to entice drilling in US shale, but we don't have low interest rates.

These are futures contracts from the CME for today. WTI contracts out in later 2027 were trading below $70 today. They were $65 out in 2028. The folks that do this for a living clearly think $70 is in the cards. https://www.cmegroup.com/markets/energy/crude-oil/light-sweet-crude.settlements.html

Traders got to trade. They “feel it in their bones”.

 

[4wd]

Where did you pull out the $10 number? The industry has been using horizontal drilling and multi-fracking for over 15 years. $60 would only be breaking even.

Yep. And the jet and yacht thing? Large IOC’s use corporate jets for business …
If you are an Independent - same as any wealthy person who can afford things most can’t …

 

[SC Maintenance]

Traders got to trade. They “feel it in their bones”.

Most futures are producers and users - refiners, airlines etc. only a small amount is speculators especially out any duration.

 

[DCDG]

I’ll go out on a limb and counter the idea that “ things will get back to normal”. The US oil industry will not go back and drill for $70 oil. Harold Hamm set the tone when Continental stopped drilling for $60 oil in North Dakota earlier this year.

I will say I was wrong if it goes back, but let’s see.

Why? What goes up must come down.

 

[Snagglefoot]

Why? What goes up must come down.

Haha, oversimplified. $100 dollar oil from 2008 is not the big kick in 2026. Just from inflation it would have to be $150. Plus that ignores the huge extra cost chasing bbls from shale. Oh well, well see. Exxon's first quarter producing oil at low hedged prices will tell a story. Stay tuned.

 

[Snagglefoot]

Most futures are producers and users - refiners, airlines etc. only a small amount is speculators especially out any duration.

I'll try scare up an article on this. I believe speculative trades by proffessionals trying to book a quick buck are 10 times the volume of producers and users.

 

[fdcg27]

The markets for crude oil and refined products have varied by a factor of more than 2X over the past twenty years, with a nominal dollar high of over four dollars in the summer of 2008, equal to around six dollars today in constant dollars, to a low of under two nominal dollars in the summer of 2021.
To assume that prices for both crude and refined products will decline is no more than an observation of what has been a historical pattern.

 

[SC Maintenance]

I'll try scare up an article on this. I believe speculative trades by proffessionals trying to book a quick buck are 10 times the volume of producers and users.

30 days maybe. 6+ months out no. It’s large users and producers hedging there actual use.

 

[spk2000]

Keep in mind that the big oil producers aren't paying market rates for all that oil they drill and pump themselves. It might cost them $10 for a barrel of crude from their own holdings. The present spike in fuel prices in the US is a scam. We'll see how many new yachts and executive jets the oil CEOs buy over the next year from these windfall profits.

Agree and the last time gas went up they raised prices of nearly everything but when gas went back down prices did not follow. Now they want to raise them again and blame gas but we have already been paying for the high gas prices along the way

 

[SC Maintenance]

Keep in mind that the big oil producers aren't paying market rates for all that oil they drill and pump themselves. It might cost them $10 for a barrel of crude from their own holdings. The present spike in fuel prices in the US is a scam. We'll see how many new yachts and executive jets the oil CEOs buy over the next year from these windfall profits.

No one is making oil for $10 a barrel. Cheapest is Saudi at around $20. Guyana / Russia / rest of the ME is like $30. US shale is approaching $60.

 

[K-Man]

No one is making oil for $10 a barrel. Cheapest is Saudi at around $20. Guyana / Russia / rest of the ME is like $30. US shale is approaching $60.

$20/barrel is still cheap. My point was that the big dogs are pricing fuel as though they're buying all of it on the market at over $100/barrel. They aren't.

 

[Snagglefoot]

I’m not sure if folks understand how oil marketing works. Do people think that Exxon produces Permian oil, then it goes down a Exxon pipeline to a Exxon oil tank, then goes to a Exxon Refinery, then Exxon decides to make up a price for that bbl of oil?

 

[grampi]

The US oil industry has been trying to give a wake up call to the world. The world is not awash in oil.

There are some who experts who claim the planet is constantly producing crude oil...

 

[grampi]

I watched 2 seasons of Landman and I agree with your assessment. Got to make global oil prices go up significantly for the US oil producers to make it worthwhile to drill and pump and also get that Venezuela oil.

Like watching Landman is good tool to determine future prices

 

[grampi]

Not how it works at all. Sorry.

You're right. Speculators will NEVER stop going crazy. Crude oil should've never been made part of the commodities market in the first place...

 

[grampi]

It is amazing to me how many people think American oil is American oil. Or that big oil is our friend. Big oil is a for-profit business.
The world runs on oil; they have us by the short hairs.

Basic Economics teaches us the best way for the market to effectively lower prices is to find a lower cost viable alternative. A viable alternative drives competition and reduces the product's monopoly power position.

Big oil is our friend much like insurance companies are...

 

[grampi]

Seeing a lot of fear lately, the unknown and unknowable has many on edge. This will pass.

Feelings SHOULD NOT have anything to do with pricing...

 

[JeffKeryk]

Feelings SHOULD NOT have anything to do with pricing...

You're right; it is all about profit, like any for-profit business.

 

[SC Maintenance]

Yesterday the first crude carrier from USA arrived in Japan. It was big news in Japan - on TV and such I am told.

So now you know where its going and why its going up, if Japan is willing to ship our crude half way around the world.

https://www.japantimes.co.jp/business/2026/04/26/us-crude-oil-arrives-in-japan/

 

[97prizm]

I’ll go out on a limb and counter the idea that “ things will get back to normal”. The US oil industry will not go back and drill for $70 oil. Harold Hamm set the tone when Continental stopped drilling for $60 oil in North Dakota earlier this year.

I will say I was wrong if it goes back, but let’s see.

Remember many oil companies capped oil wells decades ago when they thought they were "tapped out". Many companies are revisiting old oil wells with newer technologies.